Although Michael Porter’s well
known strategy framework suggests that
cost leadership and differentiation are the
key approaches to sustain a competitive
advantage in the business, he argues that
trying to do both approaches would lead
the company inconsistency as a result in
its difficulty to achieve (Shaw, 2007; Wirtz
et al., 2008). This is because cost leadership
is much easier to establish on the shorthaul
routes and regional markets than
long-haul routes, so it seems to indicate
that many airlines in particular flag carriers
do not seek out a cost leadership position
but they attempt to find the differentiation
position in order to provide a value-formoney
solution to a wide range of
passenger requirements (Shaw, 2007).
However, Singapore Airlines is
successful to combine differentiation in
term of market positioning and high
quality of services, with a cost leadership
strategy to deliver service excellence in a
cost-effective way (Wirtz et al., 2008) (see
exhibit 1). Thus, it seems to indicate that
SIA is positioned itself on the premium
service, quality and market segments of
the international flights (Chan, 2000a).